by Sam Willis
Accurately estimating the cost of a construction project is essential for securing profits and client satisfaction. However, this is easier said than done, with construction industry statistics showing that roughly 85% of all jobs go over budget in some way. Sadly, the people who put their money, reputation, and organizational futures on the line to initiate a construction project — the owners — have historically been left with very little recourse for how to mitigate this troubling statistic.
To help your project avoid being on the wrong end of this figure, the following breakdown analyzes the importance of accurate estimation, how estimation accuracy can be improved, and how innovative construction software can help.
Accurate Estimates Help Projects from Going Over Budget
Bidding a construction project requires delicately balancing a variety of factors. For example, if a hotel wants to have the floor of its lobby replaced, the following considerations must be carefully weighed to arrive at an accurate figure:
- Demolition of the current floor and disposal of the waste
- Maintenance work to the foundation
- Any below grade insulation or industrial radiant heating systems that will be installed beneath the new floor
- New flooring material
- Labor, subcontractors, and consultants
- Equipment rentals
- Material storage
- Budget for delays and unforeseen events, such as weather or rework
While contractors can juggle these factors and present owners with an upfront bid that looks competitive, the current construction climate has created a situation in which can bids deviate significantly from the reality. COVID-related labor shortages and supply chain bottlenecks have created a scenario in which contractor bids are often way off target. Unfortunately, most project owners are left in the dark about the impact that these real-time crises are having on their projects.
Using Owner Insite’s collaborative construction project management software, owners can see exactly what is unfolding on the job site, communicate effectively with all stakeholders, and ensure that the budget remains tenable throughout the life of the project. It provides an intuitive platform for uploading all necessary project documents, including change proposals, submittals and ASIs, and purchase orders. That visibility provides a fully transparent view of real-time facts and figures as they develop throughout the project’s lifespan.
Accurate Estimates Keep the Project on Schedule
Accurate budgeting is essential to protecting an owner’s ROI. But creating a realistic schedule — and then adhering to it — is no less important. Even beyond the direct fiscal impact, prolonged delays can erode customer or constituent trust in your brand.
With any construction project, there is a great deal of excitement surrounding the completion of the work. Whether it be the opening of a new restaurant or the first day of a new school campus, owners are going to be actively advertising the date of their grand opening. However, due to the aforementioned labor shortages and supply chain bottlenecks, construction projects across the nation have seen unprecedented schedule slippage, creating a PR nightmare for owners who have to continually delay their grand opening.
When it is your organization’s name on the banner of the construction area, you will ultimately be held responsible for these missed deadlines. However, without having real-time insight into any delays that may be unfolding in the construction process, owners are not able to effectively communicate with workers as to the status of the project. By using an owner-focused construction project management software, owners can be directly apprised of real-time events and can mitigate schedule deviations and work to deliver on the expected completion dates.
How to Improve Construction Estimations
Whether you are building a new subdivision from the ground up or performing a relatively simple project like installing backdraft dampers in a commercial plant, there are a number of ways to use Owner Insite software to improve construction estimates:
- Hold contractors accountable. Owner Insite’s cloud-based construction management software provides owners with daily field reports, allowing the owner to see exactly what is getting done during a specific timeframe and keeping contractors honest with their performance.
- Compare past projects. Look at past estimates and actual costs and make note of any discrepancies. This can be extremely powerful when beginning negotiations on a new project.
- Streamline communication. Owners can communicate directly with all stakeholders of the project and monitor response time, making note of which parties are slow to respond and negatively impacting completion times.
- Analyze task-completion metrics. Construction industry statistics show that less than 30% of contractors finish their work on time and within budget. Owner Insite’s construction project management software gives impactful metrics for on-task completion, allowing owners to see which contractors are following through on their commitments and which ones may be negatively impacting owners’ bottom line.
Don’t Get Hurt by Inaccurate Estimations: Choose Owner Insite Construction Software
Although there are countless ways that inaccurate estimations can hurt a construction project, owner-focused construction management software from Owner Insite can help alleviate these concerns. By providing a central repository for all project documents, allowing for quick side-by-side comparisons of past projects, streamlined scheduling, and other important job-site functions, owners can protect their construction projects from inaccurate estimates, maximizing their ROI while minimizing their risk.
Sam Willis is a contributor to Innovative Building Materials. He is a blogger and content writer for the real estate industry. Sam is focused on helping fellow homeowners, contractors, and architects discover materials and methods of construction that increase property value, maximize energy savings, and turn houses into homes.